Jul 26, 2014
Home| Tools| Events| Blogs| Discussions Sign UpLogin

Minsk Looks to Recoup $100 Million from Uralkali

August 28, 2013
By: Davis Michaelsen, Pro Farmer Inputs Monitor Editor

Vladislav Baumgertner, CEO of Russian potash producer Uralkali, visited Minsk earlier this week at the invitation of Belorussian Prime Minister Mikhail Myasnikovich. After a meeting, Baumgertner was detained at the airport and is being held in Belarus on charges of abuse of power related to the split of the FSU potash cartel, Belarus Potash Company.

Moscow is not happy. "What happened today was way out of line, odd, inappropriate and not fitting to a partnership," Russian Deputy Prime Minister Igor Shuvalov told reporters in Moscow.

But Belarus contends that they have uncovered more wrongdoing on the part of Uralkali officials including the selloff by a number of stakeholders of Uralkali stock, just before the split was announced, and more arrests may result.

Belarus earns 12% of its national revenue from potash exports and Uralkali's exit from the export cartel threatens Belorussian access to China via rail and in the broader scope, threatens to significantly reduce the sendout price for potash worldwide. Reductions to potash revenues would make a notable impact on a Belarus still recovering from a 2011 currency collapse.

A Belorussian Investigative Committee told reporters, "The unexpected break was meant to strike a blow at Belorussian [potash] producers that were seen as competitors. They planned the collapse of the global potash market."

Baumgertner faces up to 10 years in prison for abuse of power and Minsk has said it will pursue Uralkali assets in the amount of $100 million for damages in Belarus. Stock in Uralkali fell 3.4% on the news of Baumgertner's detention and with the CEO in the hands of Europe's Last Dictator, Baumgertner's own prospects are not much better.

Perspective --

We are a long way from Minsk here at the Monitor, but we expect a ripple of price declines ahead for potash. The drama in the FSU will place pressure on the price of potash here, but the decline of the Rupee along with other currencies coupled with strong Canadian inventories will do more in North America to sustain price pressure than anything. Given that, look to book fall potash on a downward trajectory as prices may not fully bottom until after the first of the year.


See Comments

RELATED TOPICS: Inputs

 
Log In or Sign Up to comment

COMMENTS

No comments have been posted



Name:

Comments:

Receive the latest news, information and commentary customized for you. Sign up to receive the AgWeb Daily eNewsletter today!.

 
 
Enter Zip Code below to view live local results:
bayer
 
 
The Home Page of Agriculture
© 2014 Farm Journal, Inc. All Rights Reserved|Web site design and development by AmericanEagle.com|Site Map|Privacy Policy|Terms & Conditions